POWER PLANT INPUT/INPUT CREDIT ADMISSIBILITY

[SURYA KANT GUPTA]

Is there any judgement with regard to availment of CENVAT credit on input/input services used in CAPTIVE POWER PLAN particularly given by HON'BLE SUPRREME COURT

[Snehal Kulkarni]

May we request you to elaborate the query in details ?

If the CPP is within the Manufacturing Area's Premises and the Power produced is fully consumed within the Manufacturing Process only, then the Cenvat Credit on the Input like FO and the Input Services like AMC is eligible.

 

[CA Rachit Agarwal]

Refere the case of Supreme Court in Maruti Suzuki Ltd, where in the proportionate amount of electricity sold was reversed.

If in case of captive power plant, if the electricity is sold to the grid/outside partly, proportionate cenvat credit on "inputs" to be reversed.

AI Summary

CENVAT Credit Eligibility: Captive Power Plant Use for Manufacturing vs. Selling Electricity Externally. Refer to Maruti Suzuki Ltd Case. A query was raised regarding the admissibility of CENVAT credit on inputs and input services used in captive power plants, specifically if there is a relevant Supreme Court judgment. One response clarified that if the captive power plant is within the manufacturing premises and the power is used entirely for manufacturing, CENVAT credit is eligible. Another response referenced a Supreme Court case involving Maruti Suzuki Ltd, indicating that if electricity from a captive power plant is partly sold outside, the proportionate CENVAT credit on inputs must be reversed.